Canola sector hopes China’s blackleg fears addressed

China to decide on action taken | The canola industry has presented information on how to mitigate spread of the disease

The Canadian canola industry is nearing completion of a research initiative aimed at restoring full access to the Chinese market.

In February 2012, China and Canada signed a memorandum of understanding to conduct research de-signed to address China’s concern about the potential spread of blackleg disease from Canadian canola shipments to Chinese rapeseed fields.

“We are nearing the end of all of the projects that we agreed to,” said Patti Miller, president of the Canola Council of Canada.

“Sometimes when you do research it raises more questions, so that’s why we haven’t come to a firm conclusion on this, but we are definitely at the very end stages.”

There has been a lot of research on how the disease is transmitted and on risk mitigation strategies, such as the use of resistant varieties.

There have also been discussions with Chinese officials about measures employed by Canada’s grain handling and transportation network to keep the disease from spreading.

Once the lingering questions have been answered, it will be up to the two governments to negotiate a solution to the trade impasse.

ADVERTISMENT

“China will have to decide whether it is comfortable with that research or whether or not it feels different protocols might need to be put in place,” said Miller.

“I’m hopeful that we’re nearing resolution and allaying some of their concerns about blackleg, but I can’t tell whether we’re near the end or not. That will be up to the negotiators.”

China has become Canada’s top canola customer by a wide margin despite the restrictions. It purchased 3.55 million tonnes of seed through terminal elevators during the first 11 months of the 2013-14 crop year. The next biggest customer is Japan at 1.96 million tonnes.

“(China) is extremely important to us and that’s why we’re going to the lengths we are to try and address China’s concerns,” said Miller.

The findings of the final research project address the root cause of the blackleg incident, which was a Chinese study that stated if blackleg ever arrives in China it will spread like wildfire throughout the countryside.

“All of the research that we’ve done we believe points to quite a different story,” said Miller.

ADVERTISMENT

There were fears that Canadian canola shipments would slow to a trickle when the blackleg restrictions were originally implemented in 2009.

That hasn’t happened due to a transitional agreement allowing exporters to sell product to select Chinese crushers.

The list now stands at 11 plants in the non-rapeseed growing area of China and two in the rapeseed growing area. The total annual crush capacity of those plants is about seven million tonnes.

That is more than sufficient capacity to accommodate Canada’s export program but Miller said the blackleg issue is still a barrier to trade.

“You don’t want to be restricted to particular plants. You want to be able to sell to any processing plant in China that would like your product,” she said.

The U.S. Department of Agriculture is forecasting that China won’t be as big a buyer of canola in 2014-15 as it was last year.